Monthly Archives: January 2011

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In the past we blogged about the municipal disaster known around here as the Palmdale Regional Airport. It came into being in the early 1970s under the nom de guerre of Los Angeles Intercontinental Airport, located in Palmdale, some 60 miles north of downtown Los Angeles. It was supposed to relieve pressure on LAX. But it proved to be a disaster. The City of Los Angeles took some 17,500 acres of high desert land for it by eminent domain, at a cost of some $100,000,000 (in early 1970s dollars). To make a long story short, airlines came and went, but none could make a go of it at that location. The airport was shut down a couple of years ago.

Why did it happen? Location, location and location. Not many people were intereseted in driving 60 miles to the airport, local passenger traffic was inadequate in spite of a $200 per passenger subsidy, and a rail line originally projected by Los Angeles planners did not materialize when the feds failed to come through with funding for it.

More recently, the New York Times carried a story about several small airports wasting millions of dollars on improvements that would serve only a few score people per day, but enjoyed the favor of powerful Congressmen ever-ready to glom on to some federal money and send it from Washington to their home districts. Now, another failing airport is in the news.

The New York Times (Patrick McGeehan, An Airport Whose Time May Not Come, Jan. 31, 2011, at p. A15) tells the story of the Stewart International Airport near Newburgh, N.Y., that “was supposed to be the long-sought fourth major airport to serve the New York metropolitan area.” But four years later “Stewart remains a mystery to most traveleres.” Truth to tell it was a mystery to us too, until that New York Times article showed up this morning.

For an Angeleno, like your faithful and obedient servant, reading the Times story was a deja vu experience. We already noted its location – 60 miles from the city (the same as the Palmdale fiasco), and — guess what? — the airport promoters were hoping to take advantage of a new express train to serve New York City. But that train was supposed to use a new tunnel under the Hudson River, and New Jersey, being in its right financial mind, has announced that, being broke, it will not contribute to its construction, thereby killing it. Sound familiar?

Bottom line: in 2007 Stewart Airport attracted 915,000 passengers, in 2008 it was down to 790,000, and in 2010 it is “on pace” to attract fewer than 400,000. An unmistakable trend. Stewart Airport’s operators blame the recession, and they may have something there. But even so, an airport, though serving the public, is a risk-carrying entrepreneurial activity, and as such subservient to the economy.

So is there any good news lurking in this dismal picture of waste of public funds? Kind of. At least, according to the Times, the Port Authority of New York and New Jersey that runs the local airports hasn’t taken the airport site by eminent domain — it leased it for 93 years for $79,000,000.

The Florida Court of Appeal made short work of a state Department of of Agriculture and Consumer Services appeal, claiming a right to attorneys’ fees in a losing case. No, we are not making it up. Some property owners in Florida sued the state for the destruction of their citrus trees in an effort to eradicate citrus canker – that program is described in Haire v. Florida Department of Agriculture, 870 So.2d 774 (Fla. 2004). The owners won, in spite of the state’s argument that no compensable taking had occurred, and eventually recovered $4,000,000 which was less than what they sought.

So the state demanded an award of attornes’ fees on the theory that the owners sought substantially more than the courts evetually awarded, so this meant that the state prevailed and was therefore entitled to an award of attorneys’ fees. Nothing doing, said the court.

”We find the Department’s arguments to be frivolous. No matter how one looks at the facts, the owners prevailed on the significant issues. The mere fact that the owners sought more in damages than the jury awarded does not mean that they did not prevail on both issues of liability and damages.”

And as if that were not enough, the court noted that the state was proceeding under the wrong statute. In Florida, eminent domain and inverse condemnation fee awards are governed by special statutes (Sections 73.091 and 73.092), not the general one on which the state relied (Section 57.041).

The case is Florida Department of Agricultural and Consumer Services v. Cox, Fla. Court of Appeal, Docket No. 4DO-979, January 26, 2011. The opinion says nothing about who will have to pay the attorneys’ fees incurred in this frivolous appeal.

We have always been amused by the bizarre assertions of California high-speed rail fans, that their creation will preserve agricultural land. Well folks, it turns out that the affected farmers disagree. For some strange reason they think the impact of high-speed rights of way running through their agricultural land will be negative.

The fact that, when it comes to inverse condemnation reportage, the press is unabashedly biased in favor of the regulators, is about as controversial as the assertion that the sun rises in the east. We have noted this fact of life in the past and have written about it repeatedly. See Gideon Kanner, Redwoods, Junk Bonds, and Tools of Cosa Nostra: A Visit to the Dark Side of the Headwaters’ Controversy, 30 Environmental Law Reporter 10756 (2000), and Gideon Kanner, Lucas and the Press: How to Be Politically Correct on the Taking Issue, Chapter 5 in After Lucas: Land Use Regulation and the Taking of Property Without Compensation, at p. 102 (1993, ABA Sec. Urban, State & Local Gov’t. Law).

The first of these articles is of particular interest because it describes a case in which a federal district court threw the feds out of court, charging them with conduct which it characterized as “tools of cosa nostra” for trying to extort a “gift” of a major California redwood grove without compensation, by filing phony charges against its owner, involving some entirely unrelated Texas savings and loan matters, and then offering to dismiss those charges upon receiving the aforementioned “gift.” The property owner’s conduct was also exonerated by a federal administrative judge, and a congressional committee, and in the end the federal trial court imposed multi-million dollar sanctions against the government.

But as far as the press was concerhed the owner was a villain and the feds, in spite of their outrageous conduct, were depicted as pure as the driven snow. That article cites and quotes pertinent press coverage book, chapter and verse so, if you are so inclined, you can see for yourself that we are not making this up.

Now, we have another one of such press capers; this one involving mobile home rent control. This one consists of The Los Angeles Times coverage of the latest Guggenheim decision in favor of the city by the U.S. Court of Appeals for the 9th Circuit. It’s a doozy. It depicts the tenants (who, by the way, are the beneficiaries of six-figure windfalls at the landlord’s expense) as poor unfortunate victims of an avaricious landlord. So what makes the landlord so bad? He is arguing that when a rent control ordinance permits the tenants to charge exorbitant six-figure sums to their successor-tenants (when they move out and the new tenants move in) for the privilege of being able to live in the vacated mobile homes at below-marker rents, that is a taking of the landlord’s property. Sounds reasonable to us. If anybody should be paid for letting the new tenants live in a mobile home park, it should be its owner, not the departing tenants who have no interest in it.

The bottom line of the Guggenheim controversy is that, except for the tenants who happened to be in place when the rent control ordinance was enacted, none of the tenants — that’s right, tenants — are enjoying low rents. This is so because in order to move into the rent-controlled mobile home park, they had to pay the departing predecessor-tenants a six-figure sum (ostensibly for the mobile home which in reality is not mobile once put in place, and can be worth only a few thousand dollars) that in fact monetizes the advantage of controlled rents, and de facto makes the the new tenant pay full market rents (disguised as the inflated price of the mobile home) which by rights should have gone to the landlord.

We hope that this case will go up to the Supreme Court where the 9th Circuit has not exactly covered itself with glory in the past. So stay tuned.

Follow up. For commentary on the lumps the 9th Circuit has been taking in the U.S. Supreme Court, see the article in today’s Washington Post: Robert Barnes, Recent Decisions Amount to a Dressing Down for 9th Circuit, Washington Post, Jan. 30, 2011.

Today’s Los Angeles Times reports that the local city of Vernon has spent $54 million on lawyers in the past decade. This industrial city has only 26 households, but it has employed 34 private law firms. See Sam Allen and Hector Becerra, Tiny Vernon Spends Big on Lawyers, January 21, 2011, at p. A1. For details go to http://www.latimes.com/news/local/la-me-vernon-lawyers-20110110,0,3257302.story

As you may know, several states, including Texas, Virginia and Mississippi, are in the midst of seeking to amend their Constitutions to curb eminent domain abuses. But typically, proposed state constitutional changes enacted in the wake of the Kelo case focus on limiting the right to take — often an idle effort because judges tend to interpret these laws in favor of the government, so that in practice anything turns out to be “public use.” But Virginia is different. Its proposed, currently pending constitutional amendment also adresses compensation and provides inter alia:

“ Just compensation shall be no less than the value of the property taken or damaged, business goodwill, relocation expenses, loss of access and other economic loss proximately caused by the taking or damaging.”

Wow! A “just compensation” clause that is actually just, that provides for full compensation for demonstrable economic losses that eminent domain takings inflict on condemnees. What’ll they think of next?

We like that approach because we believe that making would-be condemnors confront the true cost of their projects up front is a good thing. As Justice Kourlis of the Colorado Supreme Court put it recently (alas, in a dissenting opinion) condemnors should have to assess the true cost of their projects realistically, before initiating them, and refrain from arguing in court after the project is on its way that the courts should ride to their rescue by limiting compensation. The added virtue of this approach is that presents the government with the true cost of public projects, and best of all, it is self-enforcing.

Of course, being an old, pessimistic curmudgeon, your faithful and obedient servant is conscious of the old saw that there’s many a slip between the cup and the lip, so that well intentioned reforms often don’t make it out of legislatures. So we will just have to wait and see what happens on that one. But hey, if you don’t try you can’t win. So we commend those Virginians for trying, and now that the Virginia Attorney General has endorsed this legislation there is real hope.

As we noted in a recent post (http://gideonstrumpet.info/?p=676 ) California’s newly elected Governor Jerry Brown has proposed to eliminate that state’s redevelopment agencies in order to save the state budget from sinking through the floor. Now the Los Angeles Times has chimed in editorially, allowing as how the Governor’s proposal may not be a bad idea. It took us a while to recover from the shock induced by this incredible spectacle of the Los Angeles Times taking this position, but hey man, you gotta take good ideas where you find them.

Here is an excerpt from that editorial that says it all:

“…[T]here is considerable question about how redevelopment funds have been used statewide. In its ‘Arrested Redevelopment’ series in October, The Times detailed the bumbling of small-city agencies in which redevelopment officials tasked with spending millions of tax dollars to build commercial projects and affordable housing produced few results and lacked accountability. A third of the state’s agencies, which spent a combined $700 million in housing funds from 2000 to 2008, did so without constructing a single new unit, the investigation found. The state lacks the power to enforce laws requiring agencies to produce housing, and lacks the money even to audit required housing construction. Agencies charged with reducing blight sometimes worsened it. Redevelopment officials often seemed out of their depth habdling projects that required the expertise of finance and real estate professionals.” Emphasis added.

“[S]mall-city agencies”? The Times ought to re-read its own front-page expose of the North Hollywood area redevelopment fiasco that blew some $117 million and created an area that was worse off than surrounding comparable ones that did not enjoy the benefit — if that is what it was — of redevelopment. But those folks achieved one thing: their ministrations engendered such fury on the part of local residents, that they prudently moved their office to more secure quarters. As we are fond of saying: Your tax money at work.

And speaking of redevelopment, it seems that none other than the City of Beverly Hills is into it too. Beverly Hills? You betcha. You don’t believe us? Then check out a city notice on page 2 of the Beverly Hills Courier of January 14, 2011, to the effect that the Beverly Hills Development Agency will hold a public hearing at which it will consider how to spend some half a million unallocated dollars on activities that will (1) directly benefit low and/or moderate income persons; (2) help to eliminate slum and and blight conditions; or (3) address an urgent need.

Golly. And here we had no idea that there are slums and blight conditions in Beverly Hills, to say nothing of persons of low income. We would gladly run pictures of those slums for your edification if we only knew where to find them.

You don’t suppose that Beverly Hills is trying to beat Governor Moonbeam to the draw, and spend or commit that money before he gloms on to it on behalf of the state, do you?

The Pittsburgh Tribune-Review reports that a Board of Viewers (that’s commissioners in Pennsylvanian) in Hampton Township awarded a land owner $675,000 for the taking of a four-acre parcel for a flood control project.

The township took the property in December 2008 and paid $280,000, which makes the commissioners’ award about two-and-a-half times the township’s offer. See Adam Brandolph, Former Hampton Business Owners Get $675,000 for Seized Land, Pittsburgh Tribune-Review, January 19, 2011.

This isn’t exactly about eminent domain, but we thought we would be remiss not to mention it to our lawyer-readers. Today’s New York Times carries two articles dealing with the problem of employment, or more accurately the lack thereof, among recent law school graduates who have gone into hock up to their eyeballs in order to fatten the purses of law schools, and who now discover that getting legal jobs that allow them to eat and repay their debts at the same time isn’t easy. The first one of these is David Segal, Is Law School a Losing Game? N.Y. Times, Jan. 9, 2011, at p. 1 (Business Section), and the second one is John Schwartz, I Want My Money Back (on Everything), Id., at p. 13.

The first of these is quite long, and covers a lot of ground. But its main point is captured by its subtitle “Deans Say Graduates Are Working. They Don’t Say How Many Are at Home Depot.” Bottom line: don’t rely too much on those law school rankings which according to the author of that article, leave something to be desired as reliable information, and invite a second look by the American Bar Association. For the entire article go to http://www.nytimes.com/2011/01/09/business/09law.html?_r=1&src=me&ref=business

If you want some unintended comic relief on eminent domain, don’t miss M. O. Walsh, Sewer Project Blues, New York Times Magazine, Jan. 9, 2011, at p. 50. The author, who identifies himself as a recently unemployed professor, takes umbrage at seeing some guys from a city contractor in his front yard, whacking away at vegetation and driving stakes to mark the right of way for a new sewage line, being as the old one has gone kaput, causing repeated sewage spills that at times reached “unspeakable” proportions.

But never mind all that. Sewage or no sewage, Professor Walsh will have none of that. “You can’t just come into my yard,” said he, and he spent “the rest of the day leaving scathing telephone messages with the manager of the contracting company whose name is on the side of the truck, sounding like someone I don’t want to be.”

Until I read this childish tantrum, I did not fully appreciate some of the nonsense that condemnors have to put up with. What did this fellow want? Continuing sewage inundations of his yard? Not likely. Did he want to get paid for the trespass and the taking of a sewer easement over his land? Probably. The Constitution guarantees him that much, but the subject of filthy lucre is never mentioned in his article. So what does he want? Beats us.

Certainly, one would think that Walsh was entitled to due process of law, like notice and an opportunity to be heard, before the contractor’s lads went to work on his lawn. We think so too, but hey man, this is eminent domain wherein the U.S. Supreme Court has held that property owners whose property is being taken for public use, are not entitled to such constitutional frippery, and their remedy — if that is what it is — is to hire a lawyer and an appraiser, and to sue in inverse condemnation. As the U.S. Courts of Appeal for the 5th and 9th Circuit have put it, the government can just seize your land and say “sue me.”

To cap it all off, Walsh informs his readers that he voted for this project, but that little detail seems of no importance to him. He resents the fact that he is out of a job while “these guys are getting paid to tear up our yard.”

So what is Walsh’s point? We have no idea. Nor do we have a clue as to why as prestgious a publication as the New York Time Magazine would waste its prime journalistic real estate (the entire last page) on such pointless super-NIMBY drivel.